Can Doughnut Economics Change How we do Business?

Kate Raworth and Doughnut Economics: A Common Sense way to Live and Prosper within Planetary Boundaries

Kate Raworth and Doughnut Economics. Image: SPÖ Presse und Kommunikation, CC BY-SA 2.0 via Wikimedia Commons

Doughnut Economics: A Common Sense Way to Live and Prosper within Planetary Boundaries

I recently attended the Reset Connect conference in London, the keynote was about Doughnut economics, an economic theory developed by Kate Raworth, a British economist and author. The conference is about sustainability and positive change, and Raworth’s model is about all of these things in an easy-to-understand, common sense model.

Doughnut economics is based on the idea that there is a safe and just space for humanity within the planet’s ecological limits. This space is represented by a visual of a doughnut, with the social foundation at the inner side of the ring (the doughnut hole) and the ecological ceiling at the outer ring. The space in between, the doughnut, is where we as a society must live. 

916px Doughnut transgressing Can Doughnut Economics Change How we do Business?
Doughnut Economics, CC BY-SA 4.0, via Wikimedia Commons

The social foundation (the doughnut hole) represents the minimum set of social and environmental conditions that people need to live a good life. These include access to food, water, shelter, healthcare, education, and political voice. The outer edge, or ecological ceiling, represents the maximum level of environmental impact that the planet can sustain. These include things like climate change, biodiversity loss, and pollution.

The doughnut economics framework suggests that an economy should aim to operate within the doughnut area, ensuring that everyone has what they need to live a good life while also respecting the planet’s ecological limits. This means moving away from the traditional focus on economic growth and instead focusing on creating a more sustainable and equitable economy.

There are a number of ways that doughnut economics could be implemented in practice. One way would be to use the doughnut as a guide for public policy. For example, governments could use the doughnut to set targets for poverty reduction, environmental protection, and social justice. Businesses could also use the doughnut to guide their operations, ensuring they are not operating in a way that harms people or the planet.

See also: The Largest Debt-For-Nature Deal Is Underway In Ecuador.

Gaining Traction Internationally

Doughnut economics is a relatively new framework, but it has already gained some traction globally. Amsterdam has adopted doughnut economics as a guiding principle for its policies and post covid economic recovery. It remains to be seen how widely doughnut economics will be adopted, but it can potentially be a major force for change. Other cities soon followed their lead, and as of June 2023, the following countries have officially begun to make progress (some are further along than others).

  • Amsterdam, Netherlands: Amsterdam was the first city to formally adopt doughnut economics in April 2021.
  • Brussels, Belgium
  • Berlin, Germany
  • Melbourne, Australia
  • Nanaimo, Canada
  • London, United Kingdom
  • New York City, United States
  • Oslo, Norway
  • Portland, Oregon, United States
  • Stockholm, Sweden

Here are some of the key principles of doughnut economics:

  • Humanity must live within the doughnut. This means that we must ensure that everyone has access to the resources they need to live good lives while also respecting the planet’s ecological limits.
  • The economy must be regenerative and distributive. This means it must create prosperity that does not damage the environment and distributes prosperity fairly.
  • We must measure economic progress in a new way. We need to move away from using GDP as the sole measure of economic success and instead focus on metrics that measure things like social well-being and environmental sustainability.
  • We must act locally and globally. Doughnut economics is not just about changing how we think about economics at the national level. It is also about changing the way we think about economics at the local and global levels. We need to find ways to connect our local economies to the global economy in a way that is sustainable and equitable.

Doughnut economics is a complex and challenging framework, but it offers a powerful vision for a more sustainable and equitable future. To address the challenges of the 21st century, we need to find ways to put doughnut economic principles into practice.

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